FedEx stock jumped Thursday after the parcel and delivery service beat earnings estimates and lifted its guidance late Wednesday.
FedEx reported Q1 2024 adjusted earnings increased 32.3% to $4.55 per share, after four quarters of double-digit declines. The results were well above FactSet analyst estimates of $3.71 per share. Revenue declined 6.5% to $21.7 billion, just shy of forecasts of $21.74 billion.
"We started fiscal 2024 with strong momentum as our global transformation actions take hold and drive improved results," CEO Raj Subramaniam said in the release. "FedEx is well-positioned to continue to deliver improved profitability while becoming an even more flexible, efficient and data-driven organization."
The company's ground delivery business saw operating income jump 59% during the quarter due to cost and productivity improvements. FedEx Express operating income increased 18% for the period due to flight reductions, aligning staffing with volume levels and shifting delivery waves in the U.S. The company's freight segment reported a 26% decline in operating income, driven by lower fuel surcharges and shipments. FedEx also completed the planned closure of 29 terminal locations in August.
FedEx Forecast
For fiscal 2024, FedEx expects flat year-over-year revenue, compared to its prior guidance of flat to low single-digit sales growth. FedEx guided adjusted earnings between $17 and $18.50 per share, excluding the impact of retirement plan accounting adjustments. The delivery business previously expected adjusted earnings of $16.50 to $18.50 per share.
FactSet analysts expect full-year earnings increase 18.2% to $17.68 per share adjusted while revenue dips 0.7% to $89.56 billion.
FedEx plans to spend $5.7 billion during the year on efficiency improvements, fleet and facility modernization, and to optimize its network and automation. The program expects to yield $1.8 billion in permanent annual cost reductions.
FedEx Stock
FedEx stock surged 4.5% Thursday, reclaiming its 50-day moving average and other technical lines.
FDX stock is trading in a flat base with a 270.95 buy point, matching its 2023 high from July 31. Shares rallied 51% so far this year through Thursday's close.
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